Sainsbury’s chief executive
Mike Coupe was not his usual tiggerish self when presenting this set of
results. He gave the impression of someone trying to make the best of a less
than ideal outcome – which, of course, he was.
In his ideal world he would
have been talking about the final preparations for the merger with Asda, but
that was blown out of the water by the Competition and Markets Authority last
Instead he was left to describe a fairly mundane set of annual results in
They show a company that is fighting hard on all fronts – trying
to compete against aggressive low-price rivals and a resurgent Tesco, while at
the same time finding the money to improve its stores, reduce debt and maintain
dividend payments to shareholders.
Once you include restructuring costs, a £46m
hit on the failed deal with Asda, statutory profits were down one-third to
£219m – a tiny number for a company that has annual sales of £32bn.
Sainsbury insiders had warned
against expecting a big strategic relaunch, a Plan B, after the Asda failure.
Shareholders will still be disappointed that there wasn’t one, and will no
doubt be pressing hard on whether – or rather when – it will emerge.
Investors waiting for concrete Sainsbury's plans
More on Sainsbury's.
John Moore, senior investment manager at Brewin Dolphin,
said the figures were robust.
"The business may have lost market
share, but it is still performing at a good level, aided by the integration and
enhanced offering of Argos – the Asda transaction would have offered the
potential to push this to another level.
While there is a commitment to
increase and accelerate investment in the business from management, investors
will be waiting for more concrete plans in the months ahead to see what
Sainsbury’s next step will be," he said.
Sainsbury's tops the FTSE
Sainsbury's shares are the biggest risers the FTSE this morning after better than expected full year underlying profit.
Shares in the supermarket giant are up more than 4.7% to 232.95p. Bear in mind, however, that shares tumbled in February from about 288p after a proposed merger between Sainsbury's and rival Asda was dealt a blow by the competition watchdog.